Small increases in gross revenue and profits per equity partner (PPP) brought Stevens & Lee to all-time highs in those categories for 2012. The Reading, Pa.-based firm grew its gross revenue 1.3 percent from $113 million in 2011 to $114.5 million in 2012. Revenue per lawyer (RPL) stayed about flat, moving from $680,000 to $685,000, and PPP rose 1 percent from $1.01 million to $1.02 million.
Stevens & Lee was able to boost PPP despite seeing a 2.6 percent drop in net income to $55.5 million because of the rise in gross revenue coupled with the decrease in equity partners from 56 in 2011 to 54 in 2012.
Stevens & Lee’s overall headcount increased by one lawyer to 167 attorneys across its 13 offices. The nonequity partner tier grew by one lawyer to 54 nonequity partners. The firm’s average compensation for all partners stayed the same year over year at $690,000.
Firm President Ernest Choquette said this marks the third year of increases in key financial metrics for the firm. He said he is proud of that fact given what the profession as a whole has faced in the past few years. Because of the firm’s conservative fiscal management and focus on revenue growth, Choquette said Stevens & Lee has been able to manage its way through the recession without having to make drastic personnel or operational changes.
Choquette said almost all of the firm’s practices were "good to very strong" in 2012. Stevens & Lee is also organized around industry groups. Choquette said the insurance, health care, financial institutions and state and local government industry groups had a strong year. The firm’s real estate and bankruptcy practices didn’t have as strong of a year, but Choquette said that was a function of the economy.
"We’re working hard to build those groups and help them to get back to the point [where] they are building revenue and adding clients," Choquette said.
Stevens & Lee built up some practices in 2012, adding depth and a new leader in its white-collar defense and investigations practice. The firm hired William DeStefano and Terri Pawelski from Buchanan Ingersoll & Rooney. DeStefano now heads up the practice.
Stevens & Lee also hired Buchanan Ingersoll health care partner Thomas Tammany and added a government consulting practice to its Griffin/Stevens & Lee Consulting subsidiary with the hire of former state Representative John C. Bear.
When it comes to PPP and profit margin, Stevens & Lee often outperforms its larger Am Law 100 counterparts thanks to lower overhead per attorney. Choquette said the firm’s geographic footprint that consists of mainly lower-cost markets has been a key point in the firm’s business model.
"While we operate in a number of markets, a number of which have significantly higher costs than others, we maintain virtually all of our overhead and management functions in low-cost areas," Choquette said, adding that gives the firm a "significant advantage" from a cost perspective.
While expenses went up in 2012, Choquette said Stevens & Lee adopted expense protocols several years earlier than many of its peers. He said a little fluctuation in expenses year to year is expected.
The firm’s profit margin took a slight hit in 2012, dropping from 50 percent to 48 percent. Choquette said it’s difficult to take a snapshot of expenses even on an annual basis. He said the firm pays expenses at the appropriate time rather than looking to prepay. He said that if expenses were higher in 2012, he would expect them to be lower in 2013.
Stevens & Lee did spend several months of 2012 fighting a legal battle brought by Elliott Greenleaf after Stevens & Lee hired former Elliott Greenleaf Harrisburg office leader William Balaban. Elliott Greenleaf accused Balaban and Stevens & Lee of accessing Elliott Greenleaf files after he left the firm. Stevens & Lee, who hired attorneys at Bazelon Less & Feldman to defend it in the matter, eventually fired Balaban and all parties settled the matter confidentially in August.
When asked whether the matter had any effect on the firm’s 2012 finances, Choquette simply said "no." He said the matter is closed and the firm has moved on.
Stevens & Lee is looking ahead to the rest of 2013, which Choquette said shows positive prospects for the firm and its clients.
When it comes to growth, Choquette said Stevens & Lee regularly looks at opportunities in "contiguous" markets.
"We’re not looking to become transcontinental," he said.
For now, the focus is on beefing up existing locations. Choquette said he is looking "very hard" at adding attorneys in the Philadelphia region as well as in the firm’s two New Jersey locations, the Wilmington, Del., office and in New York City.